The Lagos Chamber of Commerce
and Industry (LCCI) on Thursday declared support for the new pump price of fuel imposed by the Federal Government.
The Director General of the
Chamber, Muda Yusuf, said in
Lagos that considering the
transparency issues that
characterised the management of
the fuel subsidy regime, it was
inevitable that the decision had to
be taken to create a level playing
field for all consumers.
Yusuf said over-regulation of
the downstream petroleum sector
had resulted in acute constraints
that the country had been facing,
pointing out that the subsidy
regime had put enormous
pressure on government finances
and the country’s foreign
reserves.
According to the LCCI boss, it was
long evident that the fuel subsidy
policy choice was not sustainable,
pointing out that the decision by
the government to review and
liberalize the sector was in the
long-term interest of the economy
and the people.
“There are two components of the
fuel subsidy phenomenon. The
first is the actual subsidy, which is
the differential between the pump
price and the landing and other
costs of fuel. The second [and
more disturbing component] is
the blatant corruption inherent in
the fuel subsidy regime,”
Yusuf said.
According to him, for decades, the country’s
economy had been bleeding from
the corruption inherent in the
subsidy phenomenon, with
subsidy payments running into
trillions of Naira.
“In an economy with huge deficit
in economic and social
infrastructures, it was simply
scandalous to sustain that kind of
subsidy regime. It is in the overall interest of
the economy and citizens for it to be
discontinued,” he said.
One of the critical elements of the oil and gas
sector reform, particularly the downstream
sector, he explained, was the complete
deregulation of the sector that would bring a
lot of benefits to the economy.
The deregulation policy, he noted, would free
resources for investment in critical
infrastructures in the power, roads, the rail
systems, health and education sectors to
improve productivity and efficiency in the
economy, while impact positively on the
welfare of the people.
He added that the policy would boost private
investment in the downstream oil sector,
especially in petroleum product refining,
adding that the ultimate benefit would be the
reduction in the importation of petroleum
products to ease the pressure on the foreign
exchange market as well as foreign reserves.
Again he said the removal of fuel subsidy
would eliminate the rampant patronage, rent
seeking activities and corruption that
characterise the downstream oil sector;
eliminate fuel queues; guarantee products
availability and create more jobs
opportunities for Nigerians in the downstream
oil sector.
Yusuf however said the current foreign exchange policy
needs to be urgently reviewed to improve
liquidity and transparency in the foreign
exchange market.
“Only a limited success will be achieved if the
current rigidities in the management of the
foreign exchange market persist,” he said.
and Industry (LCCI) on Thursday declared support for the new pump price of fuel imposed by the Federal Government.
The Director General of the
Chamber, Muda Yusuf, said in
Lagos that considering the
transparency issues that
characterised the management of
the fuel subsidy regime, it was
inevitable that the decision had to
be taken to create a level playing
field for all consumers.
Yusuf said over-regulation of
the downstream petroleum sector
had resulted in acute constraints
that the country had been facing,
pointing out that the subsidy
regime had put enormous
pressure on government finances
and the country’s foreign
reserves.
According to the LCCI boss, it was
long evident that the fuel subsidy
policy choice was not sustainable,
pointing out that the decision by
the government to review and
liberalize the sector was in the
long-term interest of the economy
and the people.
“There are two components of the
fuel subsidy phenomenon. The
first is the actual subsidy, which is
the differential between the pump
price and the landing and other
costs of fuel. The second [and
more disturbing component] is
the blatant corruption inherent in
the fuel subsidy regime,”
Yusuf said.
According to him, for decades, the country’s
economy had been bleeding from
the corruption inherent in the
subsidy phenomenon, with
subsidy payments running into
trillions of Naira.
“In an economy with huge deficit
in economic and social
infrastructures, it was simply
scandalous to sustain that kind of
subsidy regime. It is in the overall interest of
the economy and citizens for it to be
discontinued,” he said.
One of the critical elements of the oil and gas
sector reform, particularly the downstream
sector, he explained, was the complete
deregulation of the sector that would bring a
lot of benefits to the economy.
The deregulation policy, he noted, would free
resources for investment in critical
infrastructures in the power, roads, the rail
systems, health and education sectors to
improve productivity and efficiency in the
economy, while impact positively on the
welfare of the people.
He added that the policy would boost private
investment in the downstream oil sector,
especially in petroleum product refining,
adding that the ultimate benefit would be the
reduction in the importation of petroleum
products to ease the pressure on the foreign
exchange market as well as foreign reserves.
Again he said the removal of fuel subsidy
would eliminate the rampant patronage, rent
seeking activities and corruption that
characterise the downstream oil sector;
eliminate fuel queues; guarantee products
availability and create more jobs
opportunities for Nigerians in the downstream
oil sector.
Yusuf however said the current foreign exchange policy
needs to be urgently reviewed to improve
liquidity and transparency in the foreign
exchange market.
“Only a limited success will be achieved if the
current rigidities in the management of the
foreign exchange market persist,” he said.
